Why does Blender warp UV pelt when unwrapping tight geometry?
As mentioned in the comments, Blender supports two algorithms for making a 2d projection of the mesh, Angle Based and Conformal. Angle based is the default and generally handle complex and organic shapes better, but runs into problems for some cases (e.g. the tight loop cuts you are using). In these cases it is best to try the Conformal algorithm.

The conformal term comes from the mathematical term conformal map, a function/projection that aims to minimise the difference in angles between the source and destination.
More details on the particular method used can be found here if you are mathematically inclined.